This is the first of four posts on the health care issue. For an overview of the various posts click here.
Governor Rendell’s Prescription for PA has a number of elements. Some of them have already been enacted. The two critical pieces remain to be enacted are Cover All Pennsylvanians and Health Care Reform.
The first is Cover All Pennsylvanians (CAP). The Rendell plan, in its most recent iteration, provides a comprehensive health insurance plan—including prescription drug and mental health coverage—to adults and families with less than 300% of the federal poverty level, which is $29,400 for a single adult and $60,000 for a family of 4. This cost of this subsidized coverage would be on a sliding scale, with those at the federal poverty line ($9,800 for a single adult and $20,000 for a family of four) paying $10 per month per adult and those at 300% of the federal poverty line paying $60 per month per adult. Individuals or families above 300% of the federal poverty line would pay the full cost of insurance or $280 per adult.
Cover All Pennsylvanians enables employers with 50 or fewer employees whose average wage is less than the state average age to offer their employees subsidized insurance. Employers will pay $130 a month per employee while their workers will also between $10 and $70 per month, depending on their income.
The Second is Health Care Reform. The Governor’s plan calls for a number of measures that would stop health insurance prices from skyrocketing. It empowers the insurance commissioner to regulate health insurance rates and to create a standard health care package for insurance for small businesses. It requires private health insurers to adopt community rating. Under RxPA, private insurers won’t be able to deny insurance to those who have pre-existing medical conditions or charge higher prices on the basis of sex. Big businesses don’t have so much trouble in this area because the costs of insuring, for example, young women who might become pregnant, are spread among a large number of employees. But insurance for small businesses can become prohibitively costly because insurers charge much more for businesses that hire a lot of young women than young men or that have one or more employees with pre-existing conditions. The Rendell plan also regulates the introduction of expensive medical equipment so as to prevent duplication in particular areas of the state. It requires health insurers to spend a minimum of 85% of their premiums on health care, lowering administrative costs. It encourages the development of e-prescriptions and computerized medical records, both of which would keep health care inflation in line. And it provides start-up funding for new federally qualified health centers and nurse-managed health centers that will be open in the evenings and weekends, thereby reducing reliance on more costly emergency rooms.
Programs that are part of RxPA to reduce hospital-acquired infections and to expand the scope of practice for nurse-practioners and other health professionals have already been enacted. They will also reduce reducing the skyrocketing costs of medical care.
Because CAP will, over four years, insure about three quarters of the uninsured in Pennsylvania, it too will reduce the costs of health insurance. Most people without health insurance get some medical care, although they often don’t get it soon enough and in locations that are best suited to serving them. The medical care of the uninsured is paid for by all of us who are insured. (So now you know why an aspirin costs $45 in your hospital.) By covering those without insurance, CAP will reduce the cost of health insurance for everyone else.
Indeed the political logic of Rx for PA rests precisely on the interaction between health care reform and CAP. We expect businesses that already provide health insurance to their employees to be among the biggest supports of Rx for PA. These businesses already provide insurance not just for their own employees but for all those who are uninsured. And because of this, and some other features of our irrational health care system corrected by Rendell’s Health Insurance Reform proposals, their costs for health insurance are going up by leaps and bounds. Their competitors who don’t provide health care for their employees can undercut their prices. CAP and Health Insurance Reform work together to level the playing field by helping all businesses to insure their employees and by keeping the lid on the price of insurance.
That is why a union like SEIU is fighting for health insurance proposals along those offered by Governor Rendell. Some of our members do not have health insurance and they will benefit from CAP. But most of our members have health insurance secured through collective bargaining. And every time we negotiate a new contract, employers complain about the costs of health insurance, seek to reduce coverage or put more of the burden of paying for health insurance on our members, and say they cannot afford higher wages because of the cost of health care. So our members, like their employers, will benefit from Rx for PA.